COUNCIL AGENDA ITEM NO. I-14 COUNCIL MEETING OF 5/1/12 ORDINANCE NO. 2771 AN ORDINANCE OF THE CITY OF REDLANDS AMENDING CHAPTER 5.76 OF THE REDLANDS MUNICIPAL CODE TO IMPLEMENT THE DIGITAL INFRASTRUCTURE AND VIDEO COMPETITION ACT OF 2006. WHEREAS, the development of cable, video and telecommunications services and systems provides benefits for the residents of the City of Redlands ( City ); and WHEREAS, the Digital Infrastructure and Video Competition Act of 2006 ( DIVCA ), codified in California Public Utilities Code section 5800, et seq., established a regulatory structure whereby the State, by and through the California Public Utilities Commission ( CPUC ), as the sole franchising authority grants franchises, regulates build-out and nondiscrimination standards, imposes user and application fees, and establishes franchise fees to video service providers; and WHEREAS, the CPUC s sole authority to grant franchises necessitates that the City repeal its existing Cable Television Systems regulations, currently set forth in Chapter 5.76 of the City s Municipal Code, which provide that video service providers must obtain franchises locally through the City; and WHEREAS, in exchange for the use of the City s rights-of-way and other public facilities, DIVCA requires all holders of state franchises that deliver video services within the City s jurisdiction to pay the City a five percent (5%) franchise fee as rent, unless the City reduces that amount; and WHEREAS, DIVCA establishes that local entities such as the City have the authority to implement, and are responsible for the administration of certain provisions of DIVCA; including, but not limited to, managing the rights-of-way, requiring the provision of public, educational, and government ( PEG ) channels, regulating payment of franchise fees and fees for PEG programming, and enforcing federal and state customer service and protection standards; and WHEREAS, DIVCA provides that the City may, by ordinance, establish a fee of up to one percent (1%) to support facilities for PEG channels which is paid for by customers; and WHEREAS, section 5900(d) of DIVCA provides that the City shall, by ordinance or resolution, provide a schedule of penalties for any material breach of a holder of a state franchise to comply with certain customer service standards; THE CITY COUNCIL OF THE CITY OF REDLANDS DOES ORDAIN AS FOLLOWS: Section 1. Chapter 5.76 of the Redlands Municipal Code, entitled Regulation of Cable Television Systems, is hereby repealed in its entirety and rewritten to read as follows: I:\ca\Ord\2771 Amending 5.76 Cable Television Systems.doc 1
CHAPTER 5.76 STATE VIDEO FRANCHISES Sections: 5.76.010: Title 5.76.020: Purpose 5.76.030: Definitions 5.76.040: Franchise Fee 5.76.050: Public, Educational and Government Channels 5.76.060: Audit Authority 5.76.070: Customer Service and Schedule of Penalties 5.76.010. Title. This chapter shall be referred to as the City s State Video Franchise Regulations. 5.76.020. Purpose. The purpose of this chapter is to regulate video service providers holding state video franchises within the jurisdictional boundaries of the City as specifically permitted by the Digital Infrastructure and Video Competition Act of 2006 ( DIVCA ) and the rules of the California Public Utilities Commission promulgated thereunder. 5.76.030. Definitions. For purposes of this chapter, the following words and phrases shall have the meanings respectively ascribed to them by this section: A. Cable Service shall be ascribed the meaning set forth in section 5830 of DIVCA. B. Franchise means an initial authorization, or renewal of an authorized, issued by a franchising entity, regardless of whether the authorization is designated as a franchise, permit, license, resolution, contract, certificate, agreement, or otherwise, that authorizes the construction and operation of any network in the right-of-way capable of providing video service to subscribers. C. Gross revenues means all revenue actually received by the holder of a state franchise, as determined in accordance with generally accepted accounting principles, that is derived from the operation of the holder s network to provide cable or video service within the jurisdiction of the City, as more particularly set forth in section 5860 of DIVCA. D. Holder means a person or group of persons that has been issued a state franchise from the California Public Utilities Commission pursuant to DIVCA. E. Locally produced video programming shall be ascribed the meaning set forth in section 58470(d) of DIVCA. I:\ca\Ord\2771 Amending 5.76 Cable Television Systems.doc 2
F. Material Breach means any substantial and repeated failure of a video service provider to comply with service quality and other standards specified in section 5900(a) of DIVCA. G. State franchise means a franchise that is issued pursuant to DIVCA. H. Subscriber means a person who lawfully receives video service from the holder of a state franchise for a fee. I. Video service shall be ascribed the meaning set forth in section 5830 of the DIVCA. J. Video service provider means an entity providing video services. 5.76.040. Franchise Fee. Every holder operating within the jurisdictional boundaries of the City shall pay a franchise fee to the City in the amount of five percent (5%) of that holder s gross revenues derived from the operation of its network to provide cable services or video services within the City, which shall be remitted per the provisions set forth in DIVCA. 5.76.50. Public, Educational and Government Channels. A. Upon request by the City, a holder shall initially activate and provide up to three (3) Public, Educational and Government channels, pursuant to the provisions of DIVCA. B. Every holder operation within the jurisdictional boundaries of the City shall pay a Public, Educational and Government channels fee to the City in the amount of up to one percent (1%), as may be set by resolution of the City Council, of that holder s gross revenues derived from the operation of its network to provide cable services or video services within the City to support facilities for Public Educational and Government channels, as permitted by DIVCA. 5.76.060. Audit Authority. Not more than once annually, the City Manager, or the City Manager s designee, may examine and perform an audit of the business records of a holder of a state video franchise to ensure compliance with this chapter. 5.13.070. Customer Service and Schedule of Penalties. A. A holder shall comply with sections 53055, 53055.1, 53055.2 and 53088.2 of the Government Code, and any other customer service standards pertaining to the provision of video service established by federal law or regulation or adopted by subsequent amendment by the State Legislature. All customer service and consumer protection standards under this section shall be interpreted and applied to accommodate newer or different technologies while meeting or exceeding the goals of the standards. I:\ca\Ord\2771 Amending 5.76 Cable Television Systems.doc 3
B. A holder shall comply with section 637.5 of the California Penal Code and the privacy standards of section 551 of Title 47 of the United States Code. C. The City is authorized to enforce all customer service and protection standards contained set forth in DIVCA, with respect to complaints received from the residents within the City s jurisdiction. The City is authorized to impose penalties for any material breach of any applicable customer service standards, as set forth herein. D. The City Manager, or the City Manager s designee, is authorized to monitor the compliance of holders with respect to state and federal customer service and protection standards, shall provide the holder with written notice of any material breaches of applicable customer service standards, and allow the holder thirty (30) days from the receipt of the notice to remedy the specified material breach. No monetary penalties shall be assessed for a material breach if the breach is out of the reasonable control of the holder. Material breaches not remedied within the thirty (30) day time period will be subject to the maximum penalties imposed by the City, as described in subsection E below. A material breach for the purposes of assessing penalties shall be deemed to have occurred for each day, following the expiration of the above-stated thirty (30) day cure period, in which any material breach has not been remedied by the video service provider, irrespective of the number of customers or subscribers affected. Any penalty shall be provided to the City by the violating state franchise holder and the City shall submit on-half of the penalty to the Digital Divide Account established through section 280.5 of the Public Utilities Code. E. The maximum monetary penalties set forth in California Public Utilities Code section 5900 are hereby adopted and enacted as the applicable schedule of penalties for the material breach of the applicable customer service standards by a holder, as follows: 1. For the first occurrence of a material breach, the monetary penalty shall be five hundred dollars ($500) for each day of each material breach. 2. If a material breach has occurred and notice has been provided and a fine or penalty has been assessed, for any subsequent material breach of the same nature within twelve (12) months, the penalty shall be one thousand dollars ($1,000) for each day of each material breach, not to exceed three thousand dollars ($3,000) for each occurrence of the material breach. 3. If a third or further material breach of the same nature occurs within those same twelve (12) months, and notice has been provided and a fine or penalty has been assessed, the penalty shall be two thousand five hundred dollars ($2,500.00) for each day of each material breach, not to exceed seven thousand five hundred dollars ($7,500.00) for each occurrence of the material breach. I:\ca\Ord\2771 Amending 5.76 Cable Television Systems.doc 4
Section 2. The Mayor shall sign this ordinance and the City Clerk shall certify to the adoption of this ordinance and shall cause it, or a summary of it, to be published once in the Redlands Daily Facts, a newspaper of general circulation within the City, and thereafter, this ordinance shall take effect as provided by law. ATTEST: Pete Aguilar, Mayor Sam Irwin, City Clerk I:\ca\Ord\2771 Amending 5.76 Cable Television Systems.doc 5
I, Sam Irwin, City Clerk, City of Redlands, hereby certify that the foregoing Ordinance was duly adopted by the City Council at the regular meeting thereof, held on the day of 2012, by the following vote: AYES: NOES: ABSENT: Sam Irwin, City Clerk I:\ca\Ord\2771 Amending 5.76 Cable Television Systems.doc 6